Spain’s Mapfre Completes Acquisition of Commerce Group

June 4, 2008

Spain’s largest insurer, Mapfre S.A., said it has completed its acquisition of The Commerce Group Inc., the 20th largest auto insurer in the country.

Mapfre paid $36.70 in cash per share of Commerce’s publicly traded stock, with total merger consideration of $2.2 billion. The $36.70 per share price represents a 22.5 percent premium over the average share price of the previous 30 days when the deal was announced Oct. 30 last year.

“This is an important day in the history of MAPFRE,” said Jose Manuel Martinez Martinez, chairman of MAPFRE. “Not only is the acquisition of Commerce the largest in the history of our company, but it fits perfectly with Mapfre’s growth strategy and commitment to turn into a global insurance group.”

Commerce Chairman and Chief Executive Officer Gerald Fels said “becoming a part of the Mapfre Group benefits all of Commerce’s stakeholders and we are proud that we have grown our company from a small start-up in 1971 to a $2 billion business that today becomes part of one of the world’s leading insurance groups.”

The companies won their key approval from Massachusetts insurance regulators last month and now they have been given the go-ahead by officials in New York, California and Ohio where Commerce has subsidiaries.

Commerce and its subsidiaries had nearly $1.9 billion in direct written premiums in 2007. Commerce, the largest auto and homeowners’ insurer in Massachusetts, is licensed in all 50 states and has operations in 17 states.

In addition to Commerce Insurance and Citation Insurance in Massachusetts, Commerce’s property and casualty insurance subsidiaries include Commerce West Insurance Co. in California, American Commerce Insurance Co. in Ohio, and State-Wide Insurance Co. in New York.

Mapfre said it intends to maintain Commerce’s headquarters in Webster, Mass. and will continue to write business in Massachusetts and across the U.S. through independent insurance agents.

Commerce will continue under the leadership of its current management team and its approximately 2,400 employees will retain their jobs.

The acquisition of Commerce was accomplished through the merger of a subsidiary of Mapfre, Magellan Acquisition Corp., with and into Commerce, with Commerce as the surviving corporation. The business will continue to be known as The Commerce Group Inc.

Mapfre S.A. is the largest Spanish insurance group and has a presence in 43 countries, especially in direct insurance, reinsurance and assistance markets in Latin America, where it is the largest in non-life insurer. The Mapfre Group celebrates its 75th anniversary in 2008.

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